The title, as are many of mine, is slightly misleading, but also entirely truthful!<\/p>\n
Today I would like to talk about the importance of energy independence.\u00a0 You have likely heard this term batted around a lot in the last 5 to 10 years. \u00a0Energy independence has a few very clear and immediate benefits; the first and most recognizable of which is a lower domestic energy cost.\u00a0 The other major benefit of energy independence is found in our ability to resist political pressure from foreign energy producers who are able to manipulate the global price of energy.\u00a0 When you know that the United States has a certain energy need daily, it is easy to apply economic pressure by raising energy costs to encourage the political outcome you are seeking.<\/p>\n
You have no doubt noticed the amazingly low fuel prices we are experiencing at the moment.\u00a0 Have you stopped to ask yourself why these prices are so low?\u00a0 Like most markets, price is set primarily by two factors, supply and demand.\u00a0 We can look at those two factors to determine what has changed.<\/p>\n
Has consumption of fuel in the United States been drastically reduced?\u00a0\u00a0 Recent statistics suggest that holiday travel this year will rise for the 5th<\/sup> straight year, and while vehicles have become more fuel efficient, oil use is up from a low point in 2012.\u00a0 Since we know that fuel prices are lower now than they were in 2012, we can conclude that fuel prices are falling because of an increased supply.<\/p>\n Some of this supply is coming from our domestic efforts at energy independence.\u00a0 Hydraulic Fracturing is a new oil recovery technique that has opened up oil reserves in the United States that were previously inaccessible to us.\u00a0 By pumping a mixture of liquid chemicals into oil beds, oil producers break up rock below the surface, resulting in the release of previously trapped oil reserves.\u00a0 Hydraulic Fracturing (or \u201cfracking\u201d) has taken off in the last year, and has resulted in an increased supply of gasoline being available to the consumer in the United States.<\/p>\n Fracking Cylons…<\/p><\/div>\n If we ignore the unknown environmental impacts of fracking, we can see this situation as a win.\u00a0 Lower gas prices mean lower prices on anything that must be shipped, resulting in lower food, clothing, and other costs.\u00a0 Unfortunately there does not seem to be clear scientific evidence that fracking is environmentally friendly or harmful.\u00a0 This leaves us in a situation where we may be selling our children\u2019s future to satisfy our current needs.<\/p>\n The other large factor in our currently low fuel price is the recent decision by OPEC to sustain oil production at current levels.\u00a0 OPEC stands for the Organization of Petroleum (Oil) Producing Countries and is an oil cartel that includes many of the world\u2019s largest oil producing companies.\u00a0 By making decisions regarding the production levels of oil products, OPEC has the ability to change the market price.\u00a0 When OPEC cuts production, the price of fuel rises.\u00a0 If OPEC chose to dramatically increase production, we would enjoy reduced fuel costs at the pump.\u00a0 It is the influence of OPEC that energy independence seeks to avoid.<\/p>\n It seems like OPEC choosing to continue producing oil at \u201cpre-fracking\u201d levels is a good thing for everyone.\u00a0 Lower fuel costs around the world could potentially kick start the stagnant global economy.\u00a0 Right?<\/p>\n Unfortunately it is not so simple.<\/p>\n OPEC has essentially declared a market war on the production of oil and energy outside of the members of its cartel.\u00a0 By artificially forcing the price of oil lower, American companies make less profit on each barrel of oil recovered from our own country. \u00a0As profits decrease, so do the incentives to develop additional energy capacity in the United States.\u00a0 \u00a0One of the goals of keeping the price low is to limit future competition.<\/p>\n Why doesn\u2019t the United States call OPEC on its market manipulation?\u00a0 Well, it is playing to our advantage as well.\u00a0 To understand how OPECs decision is benefiting us, we have to take a quick trip to the Black Sea region.\u00a0 Many of us will remember the seizing of Crimea from the country of Ukraine by the Russians.\u00a0 This action is the result of pro-western demonstrations in Ukraine that led to the ouster of the Russian backed President Viktor Yanukovych.\u00a0 The Russian President Vldamir Putin didn\u2019t like the loss of his access to the Black Sea, and annexed Crimea to ensure access to the sea and the economic benefits it provides.<\/p>\n What does this all of this have to do with oil you ask?\u00a0 \u00a0Well, not much.\u00a0 However natural gas is a large percentage of the Russian export market.\u00a0 OPEC is also a large exporter of natural gas.\u00a0 By keeping supplies of natural gas available, OPEC is destabilizing the price of Russian natural gas, resulting in serious economic impacts in an already struggling economy.<\/p>\n While the United States may not have encouraged OPEC to do this, it is enjoying the pressure being put on the Russian economy by lower gas prices.\u00a0 By allowing these \u201cmarket sanctions\u201d the United States hopes to be able to put enough pressure on President Putin to win concessions for the restoration of disputed parts of Ukraine to the Ukrainian government.\u00a0 \u00a0The flip side to that coin is the danger of unexpected action from Russia.\u00a0 If too much pressure is applied, President Putin may feel that his only recourse involves military or economic action against a target of opportunity.\u00a0\u00a0 We do not need to look far for a likely target.\u00a0 The European Union currently imports nearly 80% of its natural gas from Russia.\u00a0 So if Russia decides it is getting squeezed to hard, it could be a very cold<\/em> winter for many in Eastern Europe.<\/p>\n Crazy right?<\/p>\n By now you are probably asking why we should care, since there is little that we can do to change the mind of OPEC or reduce the pressure being put on countries all over the world by fluctuating energy prices.\u00a0 While it is true that we may not be able to exert much pressure on the global energy market right now, it is important for us to consider the future.\u00a0 What happens if coal prices rise dramatically in the near future, increasing our electricity costs?\u00a0 If fracking is deemed harmful to the environment and hydraulic fracturing operations are outlawed, will OPEC again set high fuel prices and squeeze our economy again?<\/p>\n We need energy independence.<\/p>\n This time when I say energy independence, I don\u2019t mean on a national level, I mean on an individual<\/em> level.\u00a0 Now it will still be a few years before we can pop into Walmart and pick up a Mr. Fusion, but we are closer than ever before to having the tools for real energy independence.\u00a0 Advances in sustainable and alternative energy are starting to add up, and as more people adopt these alternative energy sources, advancement will come more and more quickly.\u00a0 At the risk of sounding like a conspiracy theorist, I think it will become important for our upcoming generations to seriously consider \u201cgoing off the grid\u201d.<\/p>\n![\"PLEASE](\"http:\/\/www.joshuastairhime.com\/wp-content\/uploads\/2014\/12\/CylonFracking.jpg\")
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